The role of the auditors of troubled Global Trust Bank has come under the RBI scanner. The central bank has stumbled upon differences between the assessments of the bank’s financial position as reported by auditors and RBI’s own inspections. RBI is examining the possibility of complaining about GTB’s auditors for the accounting year 2001-02 and 2002-03 to the Institute of Chartered Accountants of India (ICAI).RBI found differences in auditors and its own inspection reports for accounts of two consecutive fiscals. For the period 2001-02, Lovelock & Lewes was the accounting firm, while Price Waterhouse & Co was the accounting firm in 2002-03. However, several attempts to contact these audit firms proved futile. Responding to a query on whether the central bank would seek to move against the auditors of the bank, RBI Executive Director Usha Thorat said: “We will complain against them.”Here are some of the discrepancies. Announcing the three months’ moratorium for GTB, RBI said the bank’s audited balance sheet as on March 2002 showed a net worth of Rs 400.4 crore and a profit of Rs 40 crore, while RBI’s annual financial inspection with reference to the bank’s position on March 31, 2002 revealed a negative net worth.RBI also advised the bank to change its statutory auditors for the year 2002-03.Again, as per bank’s accounts on March 2003, net worth was reported as marginally positive. But RBI’s inspection showed that the bank’s net worth had further eroded and capital adequacy ratio was negative.Meanwhile, the moratorium is expected to impact on the stock markets as GTB is also one of the clearing banks of the Bombay Stock Exchange (BSE).
